[JackSpratts]

"If someone comes to my computer, they won't find any music on there." – Nathalie Neree-Thompson


"The laws are too lenient and [Canada has] one of the worst peer-to-peer, file-sharing statistics in the world." – John Kennedy


"Just as we continue to educate fans about the right ways to enjoy music online, we will continue to enforce our rights through the legal system. Songlifting is not without consequences." – John Kennedy


"They're running roughshod over the Constitution, and they're hiding behind inflammatory rhetoric." – Patrick Leahy



















Word of the week: "Songlifting"




















March 4th, ’06






Film Industry Shuts Down P2P Sites
Louisa Hearn

Peer-to-peer file sharing networks have long been the bugbear of the recorded music industry, but now the film industry is putting its might behind initiatives to stamp out movie piracy.

Late last week The Motion Picture Association of America (MPAA) filed seven lawsuits against file sharing and newsgroup websites for allegedly facilitating illegal swapping of copyrighted files.

The MPAA's key targets are networks associated with the Torrent and eDonkey networks but it is also taking action against some newsgroups - the electronic bulletin boards that it believes have also become a source of pirated content.

"Website operators who abuse technology to facilitate infringements of copyrighted works by millions of people are not anonymous - they can and will be stopped," said John Malcolm, director of worldwide anti-piracy operations for the MPAA.

Any music companies blame peer-to-peer networks for large downturn in sales and the movie industry is keen to avert similar losses. Current estimates are that all forms of piracy cost the movie industry $5.4 billion last year.

But while file-sharing networks are often associated with piracy, civil libertarians argue that they have many legitimate uses that should not be overlooked.

Matt Black, chairman of Electronic Frontiers Australia, said: "We want anti-piracy laws to develop in a way wont unduly inhibit the use of these technologies in legitimate areas."

Others argue that no matter how many file-sharing operations are closed down by organisations like the MPAA, users will simply migrate to another network.

Nevertheless, the MPAA said its international campaign had recently notched up some "significant victories" in Europe with the help of officials in the Netherlands, Belgium and Switzerland. In the last year it said it had shut down 75 Torrent and eDonkey sites around the world.

However Mr Black said: "In the long run it's a tactic that is not going to work.

"The real answer is for the content industry to define business models that don't make it worthwhile for users to go through those channels. As has been proved in the Australian music industry which now sells content legally online, people are willing to pay for this stuff. The systems just have to be in place for content to be available in the market," he said.

While there were no recent activities documented by the MPAA in Australia, the local music industry has been very active in pursuing the Kazaa network owned by Sydney-based Sharman Networks which was found guilty last year of encouraging users to infringe copyright on the network.

The Kazaa network has now ceased to operate in Australia pending an appeal against the Federal Court's finding last week, and whatever the outcome, most parties agree the case is likely to move to the High Court.
http://www.smh.com.au/news/breaking/...191781212.html





ED2K-It.com Calls it Quits
Thomas Mennecke

It's a situation of contrasts. ISOHunt and TorrentSpy, two of the major players in last week’s copyright enforcement actions, have decided to hold the line and fight the MPAA's lawsuit. The same cannot be said about the once popular eDonkey2000 indexing site ED2K-It.com, as it has succumbed to the pressure of the MPAA.

The identity of those administering ED2K-It.com is currently unknown. In an effort to obtain the identity of the administration of ED2K-It.com, the movie industry followed the music industry’s example by filing a “John Doe” lawsuit. Because the extent of the ownership structure is unknown, John Does 1-10 were named in the complaint.

"Defendants Does 1-10 are currently unknown to Plaintiffs (Columbia Pictures Industries, Inc., Disney Enterprises, Inc., Twentieth Century Fox Film Corporation, and Warner Bros. Entertainment Inc.) They operate a website, www.ed2k-it.com, at the Internet Protocol address 67.43.11.190, by virtue of which Plaintiffs’ copyrighted works are unlawfully copied and distributed. That website is hosted by Liquid Web, an internet service provider headquartered in Lansing, Michigan, on a server located in or around Lansing, Michigan. On information and belief, all of the Defendants participate in and profit from the activities alleged herein."

The main thrust of the lawsuit against ED2K-It.com claims the defendants "...enable their users to locate and download infringing copies of Plaintiffs’ valuable copyrighted motion pictures and television shows for free and without authorization. Defendants operate their website with the express object of promoting its use to infringe Plaintiffs’ copyrights."

Another serious point of contention the movie industry articulates is the defendants “…profit unlawfully from the distribution of Plaintiffs’ copyrighted movies and television programs.”

Overall, the complaint against ED2K-It.com concludes the administrators are liable for three forms of copyright infringement; inducing, contributory, and vicariously enabling copyright infringement.

The complaint states ED2K-It.com is liable for inducing copyright infringement because the administrators are actively involved in the daily operations and maintenance of the site. With an overwhelming abundance of indexed copyrighted material, the complainants contend the administrators had to power to curb infringing material, but chose not to.

Plaintiffs also claim administrators of ED2K-it.com are liable for contributory copyright infringement. This is substantiated by the claim the defendants knew their indexing site was used overwhelmingly in the ultimate goal of infringing on the Plaintiff’s copyright.

Lastly, and perhaps most seriously, Plaintiffs contend ED2K-It.com is liable for vicarious copyright infringement. Because ED2K-It undoubtedly profited from banner ads, donations, and other advertisements, the complainants insist there was a “direct financial benefit attributable to the infringement by users of their website.”

Perhaps the monumental task of defending against the lawsuit has proven too much for ED2K-It.com. Although they have maintained their silence with the media, they have informed Gary Fung of ISOHunt this once popular eDonkey2000 indexing site will in all likelihood not return. The correspondence dictated the administrator of ED2K-it.com has decided to close their site for a “while / forever.”

The Plaintiffs in this case bring many of the same arguments as brought before the Supreme Court in the MGM vs. Grokster case. Specifically, the Supreme Court found that Grokster could be retried in the lower courts and be found guilty of inducing copyright infringement. There are many parallels to these cases; Grokster, like ED2K- It.com, merely indexed files. Also, the Grokster client only served as an interface to this index. The future of such file-sharing indexes, at least in the United States, is in serious doubt.
http://www.slyck.com/forums/viewtopic.php?t=20117





A Bit of BitTorrent Bother
Adam Livingstone

As Newsnight's resident ubergeek, I've been asked to respond to the torrent of abuse streamed our way over our piece on Friday 24 February about BitTorrent and encryption.

As a man who hacked his first home internet connection back in 1994 (my then boss used his daughter's name as a password) and downloaded his first Star Trek off Peer to Peer back in 2000 (for research purposes only of course - I never inhaled) I hope I know my way around the block.

First though, an apology. File sharing is not theft. It has never been theft. Anyone who says it is theft is wrong and has unthinkingly absorbed too many Recording Industry Association of America press releases. We know that script line was wrong. It was a mistake. We're very, very sorry.

If copyright infringement was theft then I'd be in jail every time I accidentally used football pix on Newsnight without putting "Pictures from Sky Sport" in the top left corner of the screen. And I'm not. So it isn't. So you can stop telling us if you like. We hear you.

Railways and canals

Now we've got that out the way, let us ask you a question. Why is it that every time the media starts to talk about the internet they feel compelled to bang on about paedophiles and terrorists and generally come over like a cross between Joe McCarthy and the Childcatcher from Chitty Chitty Bang Bang?

Although internet service providers sell their internet connections as unlimited usage, if people actually take them up on the offer then they can't actually cope with demand

Well here's one answer - it sells copy. Another answer is that we're totally scared of new media, because new media is railways and we're canals,
and you all just know how that's going to end.

So we seek to equate the internet with all bad things to scare you off it. At some corporate freudian level, there's some truth to that accusation.

Traffic shaping

But there's a third explanation as well. Sometimes it's legitimate.

Friday's piece sought to make a very sophisticated point in the space of four minutes. The point was this: a file sharing protocol called BitTorrent now takes up a third of internet traffic, even by the most conservative estimates. The true figure is probably higher.

Some internet service providers aren't very pleased about that, because although they sell their internet connections as unlimited usage, if people actually take them up on the offer then they can't actually cope with demand.

"Boo hoo," I hear you say to them. "Build some more wires in or whatever it is you do. That's what we pay you for." But no. The wicked ISPs have, increasingly, opted to block BitTorrent (and indeed other P2P protocols as well) using technology known as traffic shaping.

Encrypting torrents

A couple of months ago a person of my very close acquaintance [cough cough] was giving his in-laws their weekly fix of Desperate Housewives when he noticed that their Plusnet connection was resolutely not shifting the torrent.

But as soon as he switched to another torrenting program called Bitcomet, the data just came pouring through. What was going on? Well the answer was simple. There's a mysterious man somewhere on this planet called "RnySmile". He creates and updates the Bitcomet programme, and he'd reprogrammed the damn thing to encrypt the torrents so that it was goodbye "traffic shaping".

Now this was such a good idea that all the other BitTorrent programmers leapt on it within weeks. As of last weekend the three biggest torrent programs carry automatic encryption and Plusnet and friends are looking at a big hole in their metaphorical dyke. Happy ending, you might say? I couldn't possibly comment.

'Swamp of encryption'

However all this made us think the following: if torrent traffic is 30% and more of the internet, and it's going encrypted at a rate of knots, then where does that leave the spooks, spies and other law enforcement professionals who sit around monitoring the internet all day?

Sure, the RC4 encryption in question isn't so very powerful, but the sheer quantity of it we're envisaging will make decrypting it all an impossibility.

At the moment, there's little enough encrypted data flying around that using encryption for villainous purposes would just attract attention to yourself. But in the swamp of encryption that's in prospect, that will no longer be the case.

Debate

Which brings us back to paedophiles and terrorists. If you ask the security services and the police why they monitor the internet, those are the bogeymen they claim to be chasing.

In a four minute piece, we're sort of obliged to take that at face value. And it's our contention that they're not very well going to be able to do that if they're swamped by encrypted torrent data.

This proposition brought us so much sh*t that it had to be continued on the next fan. A howl of primal outrage uttered from cyberspace that we were equating copyright infringement with theft (yes we did - sorry about that) and with paedo-terror (no we didn't).

What we'd really like to hear is a debate on the issue we did raise. If the ISPs can't now detect torrent data, then how will the security services manage it? And if they do figure it out, won't RnySmile and company just up the ante again?

And is this secret war between Hollywood and the ISPs on the one side and the P2P community on the other one that can ever end in a truce, or will the stakes just keep raising and raising to the detriment of us all?

Answers on a plain text postcard please.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/h...ht/4758636.stm





3 Guilty of File Sharing
Nate Mook

The United States Department of Justice on Tuesday heralded a victory in federal court against three members of the "Apocalypse Crew" warez group. The individuals were sued for sharing digital pre-release copies of songs and albums through P2P networks, and have pleaded guilty.

The RIAA, meanwhile, sued another 750 people in its own crackdown on piracy.

In a statement, the DOJ said Derek Borchardt, 21, of North Carolina; Matthew Howard, 24, of Colorado; and Aaron Jones, 31, of Oregon obtained the music through insiders at record companies, magazine publishers and retail outlets. Songs were stored on servers run by the group.

From there, the copyrighted material was distributed "to peer-to- peer and other public file sharing networks accessible to anyone with Internet access and potentially appearing for sale around the world," the DOJ said.

The Justice Department previously sued another individual, George Hayes, 31, of Virginia, who pleaded guilty to one count of criminal copyright infringement.

The four men could face up to five years in prison and fines reaching $250,000. It's not clear when the sentences will be handed down.

In a separate action, the Record Industry Association of America announced it had filed another 750 lawsuits against unnamed individuals as part of its long-running legal efforts against P2P users. These "John Doe" suits include the individual's IP address, which the RIAA uses to discover his or her identity.

In a statement, RIAA president Cary Sherman hailed the lawsuits as protecting the integrity of the market so legal music services like iTunes can prosper. Sherman also coined a new phrase for those who download music illegally, likening them to retail shoplifters with the term "songlifter."

"Just as we continue to educate fans about the right ways to enjoy music online, we will continue to enforce our rights through the legal system. Songlifting is not without consequences," he said.
http://www.betanews.com/article/prin...750/1141156875





Oh The Irony: DRM For The Dark Side
Fernando Cassia

" Mininova is cool because it tells you if the torrent requires a password or not. This way you don't waste your time searching for a password. It also tells you if the site the torrent is at requires registration." -poster on usenet newsgroup

" what's the f*****g point of putting passwords on files anyway when it's clearly identifiable what the file is ?? - another, not-so-happy user

IT'S ENCRYPTED! I heard, loudly. I was waiting in line to send a fax at an internet cafe when I overheard a pair of teens, complaining in front of their rent-by-the-hour internet connected computer. "You need a .zip password cracker", I replied trying to be nice and sniff what they were up to. "For a 700mb cd image? forget it!" he replied. "But you know, the .zip password protection is pretty weak", I challenged the know-it-all. "Oh yeah, but this is a 700mb .RAR, we're f****d!". Oh yes they were, so I decided to mind my own business.

I sent the fax and headed home. Before leaving the place, I looked back at the teens... they were still trying to brute-force, guess the password or somehow decrypt the file. "The password must be somewhere... I spent a week downloading this movie!" one told the other with some resignation. That got me thinking and after arriving home I finally found what they were talking about.

Complaints and comments from P2P downloaders

It turns out that 'groups' - that is, the folks who routinely 'release' copies of movies, software, and porn on pirate boards, and even more so, Peer-to- Peer file sharing networks- have been encrypting -password protecting with Winrar - their releases, apparently for quite some time by now... with the first reports of such practice appearing two years ago. And this practice seems to be only increasing. Now, one can find even password- trading forums, and torrent password "search engines", so that gives you an idea of how widespread the use of such practice is as of late.

Pay to discuss the passwords... for files shared by others... on P2P networks

This is very ironic, indeed, on one side you have the industry -at least the movie and music industry- trying to force ugly, often windows-only Digital Rights Management (DRM) down the users' throat, all in the name of fighting the pirates. On the other, poorly lit side, you have the pirates breaking the industry protections, repackaging content to smaller sizes (DVD to xvid/divx, for example) and then releasing such pirate copies, but now *encrypted* once again, but supposedly to protect their own backs, or perhaps for some, even for profit.

While speaking to a local who's very knowledgeable about the "P2P scene", he told me that some groups include links on the encrypted releases to their site forums. And that you must then pay them for the privilege of getting access to the "passwords discussion" forums. Now while this probably won't protect anyone from getting busted by the powers that be, it certainly makes things more difficult for the whistle blowers and the people like RIAA or MPAA. But hey, if the P2P users can eventually find the passwords, so can the lawyers.

But if you add to it traffic encryption, things get even more interesting, and harder to control by ISPs as well. Where, how, and when will this end?. I don't know. Perhaps when the same movie industry gets their "on demand" content purchase -notice I said "on-demand purchase" not rent -people like to own their bits, not pay through the nose every time as greedy execs would hope.

The only hope we consumers have is that IPTV is done right, with "on demand" and DRM-free content purchases act together. Will that happen? I'm not holding my breath. So instead of just ending this here, I leave you with this quote from "Pirates of the Caribbean": "The only rules that really matter are these: what a man can do and what a man can't do. For instance, you can accept that your father was a pirate and a good man or you can't. But pirate is in your blood, boy, so you'll have to square with that some day".
http://www.theinquirer.net/?article=29941





Illegal File-Sharing Accusation 'Crazy,' Woman Says
Andy Nelesen

Nathalie Neree-Thompson of De Pere was shocked when she got a letter from the recording industry telling her she's being sued for copyright infringement.

"I think it's crazy, because I don't even know how to download music," said the 24-year-old mother of two.

But before one might blame the kids, it's best to know that they are 7 and 3, too young to be downloading Bob Marley's "Pimper's Paradise," Pink Floyd's "Dark Side of the Moon" and William Hung's "She Bangs" — just some of the tracks a group of record companies accuse Neree-Thompson of trading on Kazaa, an online file-sharing service.

The suit seeks an injunction ordering Neree-Thompson to stop violating the recording artists' copyrights and seeks legal fees and damages.

Neree-Thompson, a University of Wisconsin-Green Bay graduate who said she's working on a doctorate in educational psychology, was one of a half-dozen Wisconsin residents to be sued by the recording industry in recent weeks.

Two of the suits — including Neree-Thompson's — were filed in U.S. District Court in Green Bay. The other suit listed the defendant only as "Jill Radar" and did not include a hometown or contact information for the defendant.

"I don't know what to do," Neree-Thompson said Tuesday. "There was a phone number there to call (on the lawsuit) and when I called, they said to just write a letter to dispute it.

"I have a computer at home. They said because my phone number is under my name, that's why my name is on (the suit)."

The recording industry maintains its hard-line approach to music piracy, which has led to suits like these all over the country in recent years.

"For legal online services to continue to break new ground, we must do our part to protect the integrity of the marketplace," said Cary Sherman, president of the Recording Industry Association of America. "Just as we continue to educate fans about the right ways to enjoy music online, we will continue to enforce our rights through the legal system. Songlifting is not without consequences."

The latest round of lawsuits includes 750 individuals in 12 states. Many of the current suits — unlike the one filed against Neree-Thompson — name "John Doe" as the defendant, indicated the recording industry has not yet identified who is behind the music downloading.

Neree-Thompson said her name should be off the RIAA's list. The Internet music pilfering was done using a Kazaa account for "Posse31," a handle she's never heard of.

"I said they should probably try to find the name on that account … because it's not me," Neree-Thompson said. "I don't even listen to music. Right now, I'm going for my doctorate degree. I am too busy with two kids and school.

"If someone comes to my computer, they won't find any music on there."
http://www.greenbaypressgazette.com/...603010548/1207





Recording Lobbyist Lashes Canada On Copyright
Guy Dixon

Canada is one of the world's worst copyright infringers and is not far removed from China, Brazil and India, argues John Kennedy, the head of the London-based International Federation of the Phonographic Industry, a leading global lobby group for tighter copyright controls.

Canada is "nearly a piracy haven. And I'm astonished that those words are even coming out of my lips for Canada!," he said in an interview from London. "The laws are too lenient and [Canada has] one of the worst peer-to-peer, file-sharing statistics in the world."

Last year, in a report by the IFPI, Canada ranked just out of the top 10 of the globe's worst countries for copyright piracy, Kennedy said. To remedy this, he plans to continue lobbying Ottawa (either directly or through the Canadian Recording Industry Association) to enact stiffer laws and to ratify the World Intellectual Property Organization (WIPO) treaty. These could make Internet service providers, for instance, more responsible for unauthorized file-sharing of music.

There is a large camp of legal experts, artists and even record-label owners who oppose tighter legislation, particularly if it would mean suing file-sharers as the recording industry has done in the United States and other countries.

Kennedy, who will be in Toronto today for Canadian Music Week, says, however, that the lawsuits against file sharers have worked as a deterrent.
http://www.theglobeandmail.com/servl...PEntertainment





ILN News Letter
Michael Geist

French Supreme Court Reverses Private Copying Of DVDS Ruling

The French Supreme Court has overturned an appellate court ruling that blocked the application of technological protection measures since it inhibited private copying of DVDs. The prior decision involved the use of TPMs on the DVD Mulholland Drive.

French language decision at <http://tinyurl.com/lvpel> [Cour De Cassation]


Spain Implements National Electronic ID Card

BNA's Electronic Commerce & Law Report reports that the Spanish government Feb. 16 put into place its electronic national identity card certification system, which will allow citizens to use chip-equipped national identity cards for electronic transactions starting as early as March. By replacing the standard national identity card with the obligatory electronic version, the government said citizens will be able to carry out transactions that previously required their physical presence. Article at <http://pubs.bna.com/ip/bna/eip.nsf/eh/a0b2k1c1v6>
For a free trial to the source of this story, visit http://www.bna.com/prodcuts/ip/eplr.htm


Eu Data Prot. Working Party Releases Email Screening Report

The European Union Data Protection Working Party has released new recommendations on email screening practices including screening for viruses, spam, and certain content. The report expresses concern with the false positive problem on spam filtering. Moreover, it is of the view that "email providers are prohibited from engaging in filtering, storage or any other kinds of interception of communications and the related traffic data for the purposes of detecting any predetermined content without the consent of the users of the services." Report at http://europa.eu.int/comm/justice_ho...6/wp118_en.pdf





Soribada to Charge Fees in April
Han Eun-jung

The music industry claimed another victory in its ongoing war against digital contents pirates, with the country's largest file sharing network Soribada announcing plans to relaunch with a new subscription service Monday.

Soribada will resume services in March with latest version `Soribada 5,' the peer-to-peer (P2P) network said in joint press conference with the Korean Association of Phonogram Producers (KAPP) in Seoul.

``And as of April 1, after a month study of patterns of use in `Soribada 5,' we will charge subscribers of file exchange services,'' said Soribada CEO Yang Jung-hwan.

KAPP, a lobby representing music artists and record labels, said that it has also accepted an out-of-court settlement of 8.5 billion won in damages from the company.

A vocal advocate of copyright protection, KAPP was responsible for Soribada's 2005 shutdown.

The new Soribada will be modeled after other subscription services like SKT Melon, Bugs and MaxMP3, but will be somewhat different, Yang said.

Law-enforcement officials ordered the local peer-to-peer (P2P) service pioneer to terminate their file sharing software and servers in November, 2005, two years after KAPP filed a suit against the company.

Soribada was developed in 2000 by Yang and grew to become the most popular P2P music-sharing service in South Korea with more 22 million registered users.
http://times.hankooki.com/lpage/2006...7195410220.htm





CBS Radio Sues Stern for Breach of Contract
Bill Carter

CBS Radio filed a lawsuit against Howard Stern yesterday, charging that he used his last months on the air there to build up his future employer, Sirius Satellite Radio, and gained financial advantages through a stock sale at the expense of CBS.

The suit was filed in New York State Supreme Court only hours after Mr. Stern pre-emptively took the offensive at a news conference, accusing CBS of trying to threaten and bully him. Mr. Stern denounced the legal action as a "personal vendetta" intended to "distract the media" from bad financial results at CBS-owned radio stations.

After Mr. Stern's attack, CBS filed its 43-page complaint, which accused him of "multiple breaches of contract, fraud, unjust enrichment and misappropriation of CBS Radio's broadcast time." Also included in the suit were Sirius Satellite Radio, which was accused of unfair competition over Mr. Stern's CBS contract, and Mr. Stern's agent, Don Buchwald.

In its complaint, CBS said that Mr. Stern "misappropriated millions of dollars' worth of CBS Radio air time for his own financial benefit, and fraudulently concealed his interest in hundreds of millions of dollars of Sirius stock while promoting it on the air." The suit did not specify the amount of financial damages that CBS planned to seek.

CBS is claiming that Mr. Stern secretly withheld from it one aspect of his deal with Sirius — that he was to be given 34 million shares of stock, valued at approximately $220 million, if Sirius reached certain subscriber levels at a date as early as this year. CBS said the contract Mr. Stern signed with Sirius provided that he would receive the stock payment in 2010.

Because of this unknown "acceleration clause," CBS said, Mr. Stern had an incentive to promote Sirius before he left CBS in mid-December. Mr. Stern and Mr. Buchwald did receive the shares three days after Mr. Stern began on Sirius in January, and Sirius allowed them to sell the shares right after that. CBS charged that Mr. Stern had used "these advertisements" to pocket more than $200 million.

At the news conference, Mr. Stern aimed angry comments at the chief executive of the CBS Corporation, Leslie Moonves, saying that in "coming after me," Mr. Moonves was trying to cover up for "record losses in ratings" for CBS's radio station by beginning the legal assault on its once-brightest star.

"The radio division at CBS is in a shambles," Mr. Stern said. Many CBS stations have seen severe ratings declines since Mr. Stern left for Sirius.

Mr. Stern said the suit did not make sense in the context of his actions during the time he remained on CBS stations after having signed a deal to switch to Sirius.

Mr. Stern said that, in contrast with CBS's claim that he had some form of "secret agreement" with Sirius, his departure from CBS had been widely known and publicized for 14 months before his exit.

As for the idea that he promoted Sirius on his show to the detriment of CBS, Mr. Stern said he had cleared with the top CBS radio executive, Joel Hollander, his intentions to talk on the air about moving to satellite radio — while never specifically mentioning the name Sirius. He added that his show was equipped with delay buttons that could cut off his commentary at any time and CBS did not chose to exercise that option when he discussed his future. Mr. Stern did concede that CBS suspended him for one day because of concerns of how he was promoting the shift to Sirius.

Finally, he dismissed CBS's claims that he damaged the company financially, saying that advertising for his program was "completely sold out" in the months before he left CBS. "I made them record profits," he said.

Mr. Stern said he met with Mr. Moonves recently to ask why the suit was being contemplated and that Mr. Moonves told him, "I'm the one who kept you on the air and I knew I could sue you afterwards."

Through a CBS spokesman, Mr. Moonves declined to comment.
http://www.nytimes.com/2006/03/01/bu...dio.html?8hpib





Apple Offers Hi-Fi System to Use iPod in the Home
Laurie J. Flynn

Apple Computer furthered its push into home entertainment on Tuesday with the introduction of a high-fidelity stereo system for the iPod music player, as well as a new version of the Mac Mini computer with features for managing digital music and video.

The announcements, which come as Microsoft pushes its own approach to digital home entertainment based on its Windows Media Center technology, shows Apple's increasing focus on consumer electronics.

In recent quarters, sales of Apple's iPod devices and iTunes music downloads have overtaken the company's sales of Mac computers, rising to 60 percent of sales last quarter from 40 percent a year earlier. Just last week, the online Apple iTunes music store sold the billionth song since the service was introduced three years ago. To date, Apple has sold more than 42 million iPods.

"We've put a lot of work into making the iPod a part of on-the-go living," said Steven P. Jobs, Apple's chief executive, in a presentation to reporters at the company's headquarters here. "Now our second focus is in the home."

Apple's iPod Hi-Fi, an all-in-one speaker system housed in a case roughly the size of a shoebox, is priced at $349 and available in stores this week. The docking device, though not being promoted as portable, can run off six D batteries or AC power, and comes with a remote control.

Mr. Jobs said the device offered better home stereo quality than more expensive systems already on the market.

"It's home stereo reinvented for the iPod age," Mr. Jobs said.

The announcement of the iPod Hi-Fi also indicates an increasing desire by Apple to take part in the lucrative market for iPod add-ons and accessories, a business that until recently Apple had left almost entirely to third-party companies.

Today, the iPod accessories market is valued at more than $850 million, according to the NPD Group, a market research company. At the Macworld Expo in January, Apple introduced an FM radio tuner for the iPod, and on Tuesday Apple also introduced a $99 leather iPod case.

The company's new Mac Mini computer, the third in Apple's computer line to use an Intel processor, also appears to fit squarely in Apple's home entertainment strategy. Available in two models offering greater speed than earlier versions, the new Mac Mini comes with Apple's Front Row software for managing video collections, music playlists and slideshows, and also comes with a remote control. Apple's enhanced Bonjour software, which works with Front Row, allows users access to content stored on other computers over a wireless network.

The new Mac Mini, priced at $599 and $799 depending on the microprocessor, can connect with displays from Apple as well as other companies, and like the earlier Mac Mini can connect directly to a digital television set.

Van Baker, an analyst at Gartner, a market research firm, said the new products heralded the beginning of Apple's aggressive push into home entertainment. "I fully expect to see more directed at the living room cabinet," he said.

With the new Mac Mini, fully half of Apple's product line is now based on Intel chips, Mr. Jobs said. In January, several months ahead of schedule, the company announced an iMac and a new notebook computer using Intel processors.
http://www.nytimes.com/2006/03/01/te...tZV9udYYU8xxrQ





Apple Laptop Has Looks and Brains
David Pogue

REMEMBER the famous five stages of grief: denial, anger, bargaining, depression and acceptance? If you're a fan of the Macintosh computer, meet the five stages of switching to Apple's new laptop: lust, anticipation, delight, dismay and waiting.

Ordinarily, it's not really news when a computer company introduces a new laptop model. You don't see newspaper headlines blaring, "Gateway's New P32-XC5 Adds Faster Processor, Third U.S.B. Port."

But the new Apple MacBook Pro ($2,000 and up) is a different story. Although it looks nearly identical to the company's existing 15-inch PowerBook, something radical is going on under the hood.

Apple's high-end laptops are beautiful, thin and light, clad in scuff-hiding aluminum and crammed with features: Wi-Fi wireless networking, Bluetooth wireless, DVD burning, light-up keys for typing in the dark, stereo speakers, batteries with illuminated "fuel gauges" and much more. But the speed of Apple's laptops has only inched forward in recent years, no thanks to the suppliers of its processor chips ( I.B.M. and Freescale).

Apple made the eyebrow-raising decision, therefore, to replace that chip family with chips from another company you may have heard of: Intel.

Now, changing chip families in a computer isn't as simple as changing a CD in your stereo. The entire operating system and every single software program must be rewritten — recompiled, the geeks would say — to speak the new chip's language. That process can take weeks or months.

But Apple deemed the big transition to be worth the effort. In return, it gets the state of the art in laptop horsepower: Intel's new Core Duo chip, which bears two electronic brains instead of one. By the end of this year, every Macintosh model will receive an Intel brain transplant. (The same Core Duo chip, running at the same speeds, is also showing up in new Windows laptops. And no, the Intel chip does not make a Mac vulnerable to Windows viruses. It does, however, mean that in theory, with the help of a conversion kit that someone will surely write, a Mac could run Windows.)

Last month, Apple put an Intel chip into the iMac; on Tuesday, it put one into the Mac Mini. And this week, the first Mac laptop containing the Intel processor is reaching customers — a 15-inch PowerBook that's been inexplicably renamed the MacBook Pro. (Why do Mac fans despise the new name so much? Partly because all those harsh consonants — K, K, P — make the name uglier and harder to say.)

APPLE calls the MacBook "the finest laptop in the world." In truth, a more accurate description would be "the finest laptop in the world, with a small serving of disappointment on the side."

You can see why Apple might be fond of its latest machine. The one-inch-thick MacBook is only 0.1 inch thinner than the PowerBook, but somehow feels worlds sleeker and more futuristic. Fit, finish and quality are spectacular.

The wireless antenna has been moved, so Wi-Fi reception is much improved. The guts, from the bus (circuitry) to the graphics card, have been substantially accelerated. Battery life is pretty much the same as on the PowerBooks: 3 to 3.5 hours.

The MacBook trumps its predecessor in five substantial areas. First, the gorgeous, 1,440-by-900-pixel screen is much whiter and brighter. It's very, very bright. At half brightness, it matches the brightest setting of other laptops; at full brightness, it could illuminate a runway. It's really bright.

Second, a tiny video camera is tucked inconspicuously above the screen. It's ideal for taking Web pictures (640 by 480 pixels), capturing video or creating video blogs to post online. (The laptop's bounteous software collection includes programs for making blogs, Web sites, videos and podcasts.)

Better yet, the camera makes the MacBook a perfect companion to the iChat program, which lets you hold smooth, full-screen video conferences with up to three other people over the Internet — free. Other Mac laptops can join such virtual meetings (using an external camera), but the MacBook is the first laptop with the horsepower to start one. (One high-speed Mac must be the "host" of an iChat conference; slower machines connect afterward.)

The third enhancement is a slim finger-length remote control. You can use it to operate the MacBook from across the room, summoning slide shows of your photos, concerts of your music collection, playbacks of your movies or playback of a DVD you've inserted.

In addition, there's a new power cord. Now, most people probably wouldn't consider a laptop's power cord worth writing home about, let alone taking up precious newspaper space. But this one's a breakthrough.

It attaches to the laptop magnetically. If someone trips on the cord — which, in the real world of laptops, is practically an inevitability — your $2,000 computer doesn't crash to the floor. Instead, the cord politely detaches and drops, leaving the laptop sitting exactly where it was, grinning away on battery power.

This new connector still lights up helpfully to indicate that it's plugged into a working outlet. On the other hand, the white plastic power brick — in the middle of the cord — is much bigger and bulkier than before. And, of course, the new connector means that you can no longer interchange the cord with that of any other Mac laptop, as Apple fans have been able to do for years.

The biggest change of all, though, is in the MacBook's speed. It's nothing like the 4X or 5X speedup measured by Apple's benchmarks. Even so, this machine flies. It starts up fast, programs open fast, iTunes imports CD's fast, iMovie processes high-definition video fast and Web pages blink onto the screen, fully formed. This laptop makes you aware of how many little pauses you've been tolerating on your old computer.

Note, though, that all of that speed is available only when you're using programs that have been revised to work with the Intel chip — so-called Universal programs. In that category, you'll find Mac OS X itself; all of the programs that come with the MacBook (iTunes, iMovie, iPhoto, Web browser, e-mail program, calendar and address book, and so on); over 900 programs from other companies (they're listed at www.apple.com/universal/applications); and, later this month, Apple's professional programs (Final Cut, Aperture and so on).

Unfortunately, most of the big-name programs, like Microsoft Office and Adobe everything, won't be released in Universal format for quite some time. These older programs still run acceptably on the MacBook, thanks to the magic of Apple's smooth, invisible translation software. But they run slowly, with pauses here and there. Even Photoshop runs all right, although photo editors won't want MacBooks as their primary Photoshop machines.

Now, Apple always giveth and taketh away. This time around, though, Apple hath taken away quite a few PowerBook features. The S-video connector, for high-quality TV playback of movies, is gone — a weird omission, considering the multimedia emphasis implied by the new remote control. (You can restore the S-video jack with a $20 accessory cable.) The FireWire 800 connector, for high-speed hard drives, is also missing. The DVD burner is only half as fast as the previous model (4X instead of 8X) and can no longer burn dual-layer DVD discs. Current PC expansion cards (including high-speed cellular Internet cards) don't work or fit in the new narrow-format ExpressCard slot.

Most mystifying of all, Apple has removed the laptop's dial-up modem, so you can no longer send or receive faxes. You can't go online in hotels that don't offer high- speed connections (or that charge way too much for them), either. Apple points out that you can buy its tiny external modem for $50, but that's another piece to pack, track and lose.

It's also worth noting that a few programs, here and there, will require updates to iron out problems on the Intel Macs. They include the Now Up-to-Date calendar (the menu-bar list of today's appointments doesn't appear), Microsoft Virtual PC (doesn't run at all) and, at least on my test system, Microsoft Word (jitters like mad when you use the MacBook's "drag on the trackpad with two fingers to scroll" trick). And programs designed for pre-Mac OS X machines, now called Classic programs, don't run on any Intel Macs and never will.

Over all, the MacBook Pro is a beautifully engineered machine. If it's not the world's finest, it's darned close. (Apple hints that its 12-inch and 17-inch siblings are on the way.)

But in so many ways, it's a forward-thinking laptop. It won't achieve true greatness until the important programs have been rewritten for the Core Duo chip's blazing speed, expansion cards for the new slot are available, and wireless Internet is offered by every hotel, bed-and-breakfast and friend's house. Until then, call it the MacBook Po — for Potential.
http://www.nytimes.com/2006/03/02/te...s/02pogue.html





Napster Plays Blame Game
Adam Pasick

NAPSTER'S chief executive has blamed technical glitches from Microsoft and music player makers for hampering his company's ability to compete with Apple's iTunes music service.

"There is no question that their execution has been less than brilliant over the last 12 months," Napster chairman and chief executive Chris Gorog said at a New York conference.

"Our business does rely on Microsoft's digital rights management software and our business model also relies on Microsoft's ecosystem of device manufacturers," he said.

Microsoft had to grapple with the complexities of dealing with a number of different services and device makers, Mr Gorog said.

"It's a lot more complex to get organised properly than it is to build one device and one service as Apple has done," he said. "It's always been painful at the introduction of new technologies. But it always takes shape like it's done in the past."

Mr Gorog, whose company has one of the best known names in the business but has failed to put a dent in Apple's market share, argued that eventually the "Microsoft ecosystem" and its Windows Media format would prevail, with new devices on the way from firms like Samsung and Sony.

"Ultimately, the consumer electronics giants ... are all going to come to this Windows Media party," he said. "This is really going to be the ubiquitous format."

Apple's seamless combination of music player and download service has not yet faced a significant challenge from devices made by groups such as Samsung, Sony or Creative, or from services such as Napster or RealNetworks' Rhapsody, which offer monthly subscription plans using a Microsoft format.

"Apple set the bar ... it just worked," a spokesman for RealNetworks said. "That's one of the things - it's hard to make it easy and easy to make it hard."

Napster, which shares a brand but little else with the free service that originally shook up the music industry in the late 1990s, has struggled to make its case with investors and consumers, Mr Gorog said.

"We have not been as successful as we might in articulating the real value of this business," he said. Napster's market capitalisation is about $US160 million ($215 million), but it has cash assets of about $US112 million, leaving it with a relatively small enterprise value.

The company's third-quarter net loss widened to $US17 million for the three months to December 31, from a loss of $US12.8 million a year earlier. Revenue rose to $US23.5 million from $US12.1 million.

Napster has faced persistent speculation that it may be bought by a larger rival - possibly a device manufacturer or a telco - but Mr Gorog insisted there was no sale in the works, despite numerous approaches.

"We have not ever sought any sale of our business. But we have received many enquiries from around the world and I think we well continue to receive many inquiries," he said. "We will do a deal if and when we feel it's in our shareholders' interests."

The company was working on an advertising-funded music service hosted at Napster.com. It was also developing a platform for mobile phones in partnership with Ericsson, but so far it has only stuck one deal with a mobile phone carrier.

Mr Gorog insisted that despite Apple's dominance, the competitive landscape would be far different "in the next 12 to 24 months".

"A lot of people following this story in the media and investors ... are really focusing on the tree and are not stepping back and looking at the forest. To date, only 5 per cent of (music) sales have migrated digitally. We are in the very, very early days of this."
http://australianit.news.com.au/arti...-15319,00.html





Microsoft Gives Away USB Drives

Sort of

Nick Farrell

THE SOFTWARE giant Microsoft is giving away USB drives to all and sundry.

The drives, which are stamped with Microsoft’s distinctive logo, contain Volish press releases on the need to buy Microsoft licences.

We assume that punters will treasure these press releases and will not wipe them to put something else on them.

You can sign up for your licence information pack here.
http://www.theinquirer.net/?article=29978





In Sony's Stumble, the Ghost of Betamax
Ken Belson

AT first glance, Amir Majidimehr does not look like a game-changer in the battle to develop the next generation of DVD players and discs. As the vice president for Windows digital media at Microsoft, he neither steers a Hollywood studio nor controls one of the many consumer electronics giants that are betting billions of dollars on one of the two new formats that promise to play high-definition movies and television shows.

Yet when he and his team in Redmond, Wash., decided last September to abandon their neutral stance and to support Toshiba and its HD-DVD standard over the Blu- ray format led by Sony, the unexpected change of heart reverberated through the technology industry.

Suddenly, Toshiba's seemingly quixotic defense of its format had new life. Intel joined Microsoft in backing HD-DVD. Hewlett-Packard withdrew its exclusive support of Blu-ray. This month, another member of the Blu-ray camp, LG Electronics, hedged its bets, too, signing a deal to license Toshiba's technology.

And earlier this month, one of the main reasons underpinning Microsoft's move to shuck its neutrality — the complexity of producing Blu-ray technology — led to Sony's acknowledgment that it might delay this spring's scheduled release of its PlayStation 3 game console partly because the needed technology was still being worked out.

The possible delay and the Blu-ray group's loss of its once-commanding lead are not encouraging developments for Sony in its attempt to revive its electronics group after a series of bungles. PlayStation 3 is crucial to Sony's future, and not only because the latest version of its gaming consoles could generate billions in revenue; the new machines will include disc drives that will turn them into Blu-ray DVD players as well.

"The PlayStation is more than a game system to them; it's one of their attempts to own the digital living room," said Robert Heiblim, a consultant to electronics companies. "Blu-ray is also critically important to get right. They don't want to be weak in an area they feel they can dominate."

A DECADE ago, a prospective death match between competing first-generation DVD players was averted when Sony and Philips agreed to back down and join the Toshiba/Warner Brothers side, in exchange for a share of royalties that all DVD player producers pay to the format's creator. Now, no truce seems near, as neither side wants to settle for a small piece of what could be a big electronics success.

So consumers and retailers may be in for a reprise of the confusing VHS-Betamax showdown of the early 1980's, with Toshiba replacing Matsushita as Sony's adversary. But Sony hopes to have a happier resolution this time. Sony lost the battle two decades ago when its highly regarded Betamax technology was defeated by VHS, a more widely accepted alternative.

Once again, the differences between the two technologies are not huge. And a growing chorus of critics, including some studio chiefs eager to sell new products as quickly as possible, call the Blu-ray format unnecessarily elaborate and expensive.

The first HD-DVD machines from Toshiba and the competing Blu-ray players from Sony, Samsung and the other Blu-ray companies will all play movies with crisper pictures, enhanced sound and a bevy of interactive features like pictures within pictures and links to the Internet. The machines will also play older DVD's.

Technophiles got a preview of the HD-DVD technology on Wednesday at an electronics store on the Upper West Side of Manhattan. As Jessica Simpson and Johnny Knoxville cavorted in the movie "The Dukes of Hazzard," prospective buyers were able to see the difference between a plain old DVD and the high-definition kind. But the main feature was the price. Toshiba will sell two players starting in March; one will cost just $499, half the price of the cheapest Blu-ray machines, the first of which will hit the stores this spring. Samsung's first machine will cost $1,000, while Pioneer's Blu-ray player will run $1,800.

Toshiba executives have said that because more high-definition movies will be distributed over the Internet in coming years, they have essentially upgraded existing DVD technology to keep prices down. Blu-ray discs, however, include an architecture that Sir Howard Stringer, Sony's chairman, calls "revolutionary, not evolutionary."

The Blu-ray camp is trying to create a brand-new technology that will accommodate features that are still to be created. In preparation for that future, Blu-ray discs will store 25 gigabytes of data, compared with the 15 gigabytes on comparable Toshiba discs and 4.7 gigabytes on today's DVD's.

The first batch of high-definition DVD's from the studios' vaults will highlight rich graphics, vivid scenery and fast-moving action. The films include "Rambo," science fiction thrillers like "The Matrix" and "Dune" and animated features like "Ice Age." The DVD's are generally expected to cost $19 to $25.

But movies are only one front in the format war. In throwing its weight behind Toshiba, Microsoft has expanded the fight into the computer and game industries. Later this year, Microsoft will start selling an external drive for its Xbox game that will play HD-DVD discs, countering Sony's effort to turn PlayStation into a high-definition DVD player by adding Blu-ray technology. Microsoft and its ally Intel have also convinced Hewlett-Packard to consider making HD-DVD drives for computers. This would give Toshiba an answer to Dell, which remains committed to the Blu-ray format.

"The pendulum is swinging back to the HD-DVD camp," said John Freeman, who runs a technology research firm, Strategic Marketing Decisions, which last year declared Blu-ray the front-runner. "It will be interesting to see if the Blu-ray group can recover. It's only a matter of time before people start backing out of the Blu-ray camp."

Still, even with Microsoft on board, Toshiba may have only closed the gap, not overtaken the Blu-ray group. With Samsung, Panasonic and others siding with Sony, consumers will see more Blu-ray machines in the stores. And Blu-ray has more studios in its camp, which means more choice in movies. Every major studio except Universal plans to release Blu-ray DVD's, while Toshiba has commitments from only Universal, Warner Brothers and Paramount.

But one thing is clear: given Microsoft's growing power and scope in the entertainment realm — thanks to its Xbox machines, its media player software and forays into Internet television — its support of HD-DVD has deepened, and has probably prolonged, the format battle. That means consumers must figure out each format's advantages and risk being stuck with obsolete machines if one camp backs down.

This is giving retailers fits, not only because they have to carry twice as many machines and discs, but also because they have to train their employees to explain the differences between the standards.

"Both sides are digging in their heels and stupidity has prevailed," said Joe McGuire, the chief executive of Tweeter, a high-end electronics chain. Mr. McGuire called the failure of the two camps to agree on a single format "criminal" and said he would have a hard time advising consumers. "The answer to which is better is: 'We don't know,' " he said. "I'm tempted not to sell anyone these machines."

But sell they will, because retailers — and studios — need something new to throw at consumers now that DVD players are in 82 percent of American homes. Sales of DVD players are "pretty dead," said John LaRegina, a senior buyer at P.C. Richards, which has 49 stores in the New York area.

But Mr. LaRegina said format battles confused consumers and gave them an excuse not to buy. The uncertainty over who may win also forces film studios and electronics companies to hedge their bets.

Warner Brothers and Paramount, which were originally committed only to HD-DVD, decided last fall to make movies in both formats.

"It was very, very clear that Sony was not going to back down from Blu-ray, and they are basically betting their company on it," said Kevin Tsujihara, the president of Warner Brothers Home Entertainment Group. But, he added, Toshiba has mounted "something of a comeback" by winning endorsements from Microsoft and Intel.

Some Blu-ray companies are also waiting to see how the market develops before jumping in with machines of their own. If the PlayStation 3 is priced below Toshiba's $500 player, it could double as the poor man's Blu-Ray player and undercut Sony's partners. (It will also cost Sony dearly; Merrill Lynch issued a report on Feb. 17 estimating that the first PlayStation 3 players would cost about $900 to produce. If so, Sony could end up with substantial losses on those machines if they are priced around $299, as analysts expect, to compete with the Xbox 360, which has been out since November.)

"It's too early to move into this market," said Katsuhiko Machida, the president of Sharp, a Blu-ray company that has not released details for its players in the United States. "Blu-Ray won't be a big business until probably 2008," he said, so "we can watch and see what happens."

Those doubts are a far cry from Blu-ray's bravado last summer and fall, when it won endorsements from Fox, Lions Gate, Warner Brothers and Paramount. Those agreements, coupled with the presumed sway of the PlayStation 3, led industry analysts at Forrester and elsewhere to predict that Blu-ray would ultimately win the format war.

But two unexpected and little-noticed decisions by the Blu-ray group last spring managed to alienate Microsoft and ultimately revive Toshiba's sagging fortunes.

First, Sony and the Blu-ray group adopted a Java program for interactive features. Microsoft favored a rival called iHD because, among other things, it would work better with its new Vista operating system. The Blu-ray group's board also approved an encryption technology called BD+, which Mr. Majidimehr, Microsoft's vice president for Windows digital media, deemed superfluous.

THESE decisions led Mr. Majidimehr to take a deeper look at the Blu-ray format and whether it would be more expensive to produce, as Toshiba had long contended. Mr. Majidimehr and his deputy, Jordi Ribas, spent the next few months on the phones and flying to Asia to meet with Sony, Panasonic and the other Blu-ray companies.

"We asked them if they are serious, and they told us they were," Mr. Majidimehr said, referring to the added software. Microsoft also received more data that showed that the Blu-ray group was not meeting its targets for producing discs and optical drives. "We were getting a lot of data saying the HD-DVD format was a walk in the park and Blu-ray was having trouble developing theirs," Mr. Majidimehr said.

Microsoft's announcement last September raised alarm bells at Hewlett-Packard, which was coming to similar conclusions. Hewlett-Packard worried that the software included in the Blu-ray format would cost so much in royalties that H-P would be unable to add affordable DVD drives to its computers.

Blu-ray drives cost up to 75 percent more than HD-DVD drives, according to Maureen Weber, the general manager of the personal storage group at Hewlett-Packard and a former spokeswoman for the Blu-ray coalition. "There's not a lot of elbow room," she said of the thin profit margins on computers. "The economics of HD-DVD make a lot more sense for us. I'm starting to wonder about the manufacturing ability of Blu-ray."

A Blu-ray spokesman, Andy Parsons, says his group's royalties, which have not yet been set, will be far lower than critics expect. He also disputed the idea that Toshiba had any advantage because Microsoft or Hewlett-Packard might promote the use of HD-DVD in computers.

"DVD's are about movies and people watch them in their living rooms," he said. "How many people actually use their computer drives to sit and watch movies?"

He added that the price of Blu-ray machines and discs was bound to fall as volume rose. Besides, he said, Toshiba is missing the point by selling cheaper machines, because the first people who buy new technologies typically care less about cost and more about the technology.

There are other industry analysts who contend that Microsoft is simply propping up Toshiba to further its own aims, like countering the PlayStation and combating the spread of Sun's Java software. Nonetheless, Toshiba is happy for the backing, given that the format was written off for dead just a few months ago.

"There's no doubt that everyone has various agendas," said Mark Knox, an adviser to the Toshiba promotion group. "But whatever their agenda, Microsoft's support has been a huge boon to HD-DVD."

For Sony, a fortified rival spells trouble. Not only does it make it harder for Blu-ray to catch on, but it raises questions about Sony's approach of trying to create new formats when consumers turn out to be content with something less ambitious.

That is the lesson Sony learned the hard way in the 1980's with Betamax, and more recently when Apple outdid the Walkman with the iPod. Now it is Toshiba's and Microsoft's turn to challenge Sony's strategy.

Martin Fackler contributed reporting for this article.
http://www.nytimes.com/2006/02/26/business/26disks.html





Rules of the Road:

Internet Growth Is Slowing, So We Instinctively Seek New Ways of Growing and New Rules to Make It Happen
Robert X. Cringely

Internet use in American homes is still growing, but the pace of that growth is slowing according to a study released this week by Parks Associates, a market research firm from Dallas, Texas. Based on a sample of 1,000 U.S, households, the survey concluded that 42 percent of U.S. homes have broadband, 22 percent use dial-up, but that 29 percent have no computers at all, thus placing a firm upper limit on potential Internet penetration. Not to put too much faith in a single study, this Parks report generally supports a similar Pew report from last year. This has to be a kick in the head to pundits who have seen Internet access quickly becoming as ubiquitous as electric power, telephone, televisions, or indoor plumbing. It also does a lot to explain much of the current Internet hype that emphasizes non-PC applications. By applying a couple Cringely rules of thumb, we can take these study results far beyond the Parks analysis and figure out where things are really headed and why.

There are two ways to build market share for a major new technology: 1) by attracting early adopters followed by normal consumers, and 2) through a generational change where non-users literally die-out to be replaced by a whole new generation of consumers who are comfortable with the technology. An innovation can generally reach about two-thirds of the market through the first method, but to reach near 100 percent market share you need the latter. And that's the way it always is, even though we choose to forget that fact when it is more convenient to do so.

That's why electricity and telephones, both of which have been with us for over a century, have almost 100 percent market share. People aren't born today who can imagine being without a telephone or electricity, so of course they have both. The only communication product class to buck this inter-generational trend is broadcast television, which grew to 97 percent market penetration in less than 30 years, but that probably confirms my feeling that television was really perceived by the consumer as an extension of radio, which would given it a much longer effective adoption cycle.

Today Internet use and cable television use in the U.S. are roughly comparable at just under 70 percent market penetration. That means the commercial Internet, which effectively dates from the late 1980s, has grown at about three times the rate of cable TV, which began in the late 1940s and took until 1976 to reach 15 percent penetration. In fact, cable TV market penetration stood at 50 percent in 1987, about the time the commercial Internet came into being.

So the Internet has grown a lot faster than these earlier communication technologies, but then the Internet is technically dependent, for the most part, on some other host network. At the very least you need to first be a telephone customer to then become an Internet customer. That makes cable TV, even for its slower growth rate, actually the more impressive act, since its numbers are truly ab initio.

Yet it seems obvious to me that while a generation shift will make Internet access almost universal in another 20 years, the same probably won't be said for cable TV, which may well peak and decline before then simply because there will be other ways to get television. That's the distruptive nature of the Internet, which threatens telephone companies, cable companies, and TV broadcasters, alike.

The result is that each of these industries is trying to poach the others. As such, cable TV is the very heart of the U.S. broadband industry even though broadband is what will probably end up eating cable's lunch. Telephone companies like the Internet, too, just as they are also trying to find ways to enter the television business while their voice business is being savaged by VoIP.

While waiting for the inter-generational boom or bust that is inevitable, each industry is building-out to maximize the revenue from its existing subscriber base. Cable TV companies do this by hawking pay-per- view, digital cable, and video-on-demand. Telephone companies are starting to do the same. But Internet companies have a slightly different task, and that's finding ways to connect more devices and more device types to their networks. That's because, as a stupid network that offers nothing more than bandwidth and a gleaming smile to its users, the value of the Internet is increased solely by the number of connections to it. So if you have already maxed-out your PC connections, it is logical to start connecting non-PC devices.

And that's the motivation -- the real motivation -- for all these TV shows and movies suddenly being made available over the Internet. It is to get more types of devices connected to the net to, in turn, increase the business value of that network to its nominal owners, which unfortunately would not be you or me.

This is just the simple motion of tectonic plates -- slow but inevitable, and also irresistible. Against this glacial scene of course there is still a subtext of local politics and short term business advantage, but the trends are clear, and here they are:

1. All networks will eventually be subsumed into the Internet, because only as a single network can their value be maximized. This is kind of a cock-eyed interpretation of Metcalfe's Law, which says the value of a network is the square of its number of nodes. I think using a square function was Bob Metcalfe going a bit far, and the real value here is to acknowledge that network unification is a primal technical urge and -- whatever the actual value achieved =- will drive all the existing networks into a single technology with wired and wireless varieties.

2. If all networks are eventually to merge, then all the whining from this special interest or that is just whining. When SBC (now AT&T) or BellSouth complain about having to carry Yahoo or Google bits for free, they are just trying to fool us into paying even more than we already are for the same network services they would give us for free if they had to. Sharing the increased value of the larger network is worth more to these companies than the incremental revenue of bleeding Yahoo. Either they don't get this, which is very possible, or they are lying, which is equally possible.

3. This is a stretch, but it makes sense to me: If the prime directive here is simply to grow the Net as big and as fast as possible, then the best way to do that is through the balancing of data loads as much as possible across the Net. This is contrary to the client-server model that has dominated the Internet for most of its existence. Put differently, the major impediment to eventual Internet hegemony is the problem of scaling client-server applications. How big a data center do you need before you realize that no data center is big enough for some applications? Only a server-server or peer-to-peer architecture makes sense in the long run.

Here we have what might be three new laws to guide future growth of the Internet. And they tell us a lot about where things are headed. It is logical to assume that all devices will eventually be networked but we will start with devices that are either already intelligent (computers) or are very important to us (televisions). Any political or business obstacles in the path of this transition are most likely temporary. And the only way for the network to maximize its value is through server-to-server or peer-to-peer networking.

So if your ISP doesn't want you to share or re-sell your Internet connection, it is just because they don't yet realize that such sharing is really to their advantage. In time they will come to see it or they will die. If your ISP doesn't like all that Bit Torrent traffic, it is just because they haven't yet figured out that it is the long term key to their success as a business.

For the transition of television to the Net, then, heavily data center-based ventures are unlikely to be successful in the long-term. Google and its distributed shipping containers might be right for this moment or next, but they can do the math and that math tells them that pumping tens of millions of simultaneous HDTV unicasts from a Google server is no way to make money. It is much better to use Google servers to seed video content, which is then shared by many peers. This is pretty much the only way the system can scale high enough to functionally replace and then improve on today's TV.

The poster child for television 2.0, it seems to me, is a company like Grid Networks, which might be a new name to you. Like Bit Torrent, Grid has built a peer-to-peer distribution system. Like Mike Homer's Kontiki, Grid has married Digital Rights Management and a business model of sorts to its Torrent-like distribution system. But unlike most of the others, Grid (no, I am not an investor but thanks for asking) most approximates what my Mom thinks of as TV.

Kontiki has been around for a long time, and are definitely first mover in the market. They adopted a subscription model (RSS+P2P=Video), but for that the videos have to be downloaded in entirety, and there really is no "browse, click, watch" functionality in their system (at least yet). It is certainly better than waiting 2 days for NetFlix at the mail box, but it's just not quite user friendly enough in my opinion.

Grid's system, on the other hand, accomplishes two things from the end-user perspective: it is point, click and watch; and it is very very high quality. Using p2p, they can afford to send 1.5Mbps - 2Mbps video over their network because it costs the same as sending 150Kbps-200Kbps video. I was shocked by the video quality, watching a DVD-quality movie at Starbucks on my notebook computer with virtually no waiting.

But a successful commercial system can't count on anarchy, so Grid has a full Content Management System built into the network (called Media Vaults) that allows for media uploaded to a media vault to be monetized and then syndicated with XML to as many vending websites you as the content owner wants. Mix that with a ubiquitous platform player and, well, you get the point.

Apple is selling one-hour TV shows on iTunes for $1.99 with 67 percent of that revenue going to the content owner ($1.33), and a cost of 25 cents for the network delivery leaves them $0.41 for marketing and operations per video -- very thin margins. Reducing the cost of the video delivery to as low as five cents while raising the bit rate would seem to be a no-brainer.

Right now, Grid only has about 100,000 clients installed, but that's enough for 80 percent lower prices for instant-on video. A new multi-platform client is on its way; the company will become 95 percent "grid efficient" with as few as 1,000 downloaded clients. This isn't rocket science, and there may be other, even better, solutions to the same problem, but it works, it is available now, and it could change television forever.
http://www.pbs.org/cringely/pulpit/pulpit20060223.html





Single-Platform Solutions
Matthew Phillips

While improving technology and consolidation among entertainment companies has opened up new ways to reach customers, the real challenge is providing the right content affordably enough to deter illegal file sharing. Matthew Phillips reports

‘Convergence’ has long been a buzzword in the media and communications sectors. Are we now, finally, witnessing the start of a seismic shift in the consumption of audiovisual content or are the commercial, legal and regulatory challenges likely to prove too great?

Recent M&A activity — such as ITV’s acquisition of Friends Reunited, Sky’s purchase of broadband provider Easynet and the likely takeover of Virgin Mobile by NTL — demonstrates how ‘traditional’ broadcasters and television distributors are seeking to expand into new areas.

Broadband, in particular, is becoming an increasingly viable distribution method for TV content. The recently-launched ‘Sky by broadband’ service enables existing Sky subscribers to download a range of full-length movies and sports clips to their PCs, while the BBC is reaching the end of its Integrated Media Player trial, which has tested licence fee payers’ interest in a ‘catch-up’ broadband TV service.

Convergence also presents opportunities for new entrants to become distributors of third-party content, alongside the established players. BT is expected to launch a set-top box in the autumn combining a Freeview tuner with a broadband connection — the latter enabling viewers to watch a range of programming on a ‘pay on demand’ basis.

In the mobile sector, network operators are taking advantage of increasingly sophisticated handsets to offer rich media content to their subscribers. Orange, Vodafone (in conjunction with Sky) and 3 are all now offering mobile television services over their third-generation networks, while Virgin Mobile plans to launch its own nationwide service using Digital Audio Broadcasting radio capacity to deliver televisual content to mobile phones.

O2 recently conducted a mobile television trial which used digital terrestrial television (DTT) spectrum to deliver a range of channels to mobile handsets equipped with a DTT tuner, although the prospects of a national mobile television service using DTT capacity seem slim unless Ofcom releases spectrum for these purposes after the completion of the ‘digital switchover’ in 2012.

As the number of available audiovisual distribution channels increases, so do the rights and regulatory challenges. The need for appropriately tailored definitions in rights-related agreements becomes of fundamental importance, particularly where any form of exclusivity has been granted or acquired. What does ‘television’ mean in a converged world, where audiovisual content can be distributed at high quality over broadband and can be viewed away from home on mobile phones?

While lawyers can always update standard form agreements to reflect technological developments, new distribution platforms raise further questions as to who is best placed to exploit the associated revenue opportunities. Production companies are understandably keen to maximise the value of their programming in an ‘on-demand’ world. However, commercial broadcasters need to counter their declining advertising revenues from traditional television by broadening the reach of their services across new platforms, and argue that they deserve to share in the revenues from new media exploitation in return for their funding and promotion of programmes for broadcast on ‘traditional’ television.

Ofcom’s recent review of the television production sector has suggested that, in agreements between public service broadcasters and production companies, broadcasters should be free to exploit programming on any UK free-to-air platform during a ‘primary rights’ period, and to restrict exploitation by production companies during a subsequent holdback period. This ‘when, not where’ approach to new media rights makes sense in a world where distinctions between different distribution methods are becoming less clear. However, the key question is whether broadcasters and production companies can now agree on the length of these periods.

The increasingly blurred distinctions between traditional and new forms of content distribution have also raised questions over whether the existing regulation of linear television channels should be extended to new forms of content delivery. Following its review of the ‘Television Without Frontiers’ Directive, the European Commission (EC) has proposed that audiovisual content which is distributed via ‘non-linear’ methods should be subject to limited regulation. While not as extensive as that applied to traditional linear channels, non-linear service providers would be required to obey certain minimum requirements intended, for example, to protect minors and regulate commercial communications. The UK Government opposes the EC’s new proposals and, while the objectives of a minimum level of regulation are understandable, it must be questionable whether it is appropriate to impose this regulatory burden at such a crucial time in the development of these nascent distribution methods.

Even if the rights and regulatory challenges can be overcome, are consumers actually interested in these new services — and, perhaps more significantly, are they prepared to pay for them? With these questions in mind, Olswang conducted a survey at the end of last year into 1,500 UK consumers’ attitudes to convergence.

The survey results indicate that consumers are interested in having the freedom to choose what to watch and when to watch it. Indeed, timing was the most important factor among respondents who wanted to watch television over broadband — perhaps not surprising, given the popularity of Sky+ as a device to liberate viewers from the constraints of traditional scheduled television.

More revealing was the finding that 70% of respondents did not want to watch television on their mobile phones. While the concept itself held little interest, concerns about price and about picture/sound quality were also raised.

The survey also suggested some potential behavioural changes in UK homes, with traditional television and radio no longer the dominant source of home entertainment. Some 42% of respondents said they used their computers every day to listen to music, while nearly three- quarters send e-mails or browse the internet at home on a daily basis.

Furthermore, limited attention is now being paid to traditional television, with nearly half of all respondents saying they send e-mails or browse the internet while watching television.

The experience of the music industry suggests that piracy should be a further concern to current and would-be distributors of films and television programmes. The rise of next-generation peer-to-peer networks has led to an explosion in the illegal dissemination of audiovisual content. In the US, the Motion Picture Association of America has taken well-publicised action against websites associated with the illegal distribution of movies using BitTorrent peer-to-peer technology. However, while the film and television industries can learn from the music industry and take action against file sharers, there are also positive indicators for distributors of audiovisual content via new platforms.

If applied to ‘legitimate’ content, peer-to-peer technology offers an efficient delivery mechanism for the large files required to distribute television programmes and movies over the internet, provided that the content being distributed is appropriately protected by digital rights management technology. Sky and the BBC are already using peer-to- peer technology to deliver their broadband content services, while NTL is planning to trial a content distribution service using BitTorrent technology.

Furthermore, the results of the Olswang convergence survey suggest that those consumers who are currently illegally downloading pirate movies are actually the most willing to pay. Of the survey respondents, those who downloaded movies were most likely to watch payper-view movies and to rent or buy DVDs — and were also more willing than average to pay for programmes via PCs, mobiles and other portable devices.

The challenge is, therefore, to develop legitimate online alternatives to BitTorrent, which are sufficiently attractive for users to be prepared to pay for them.
http://www.legalweek.com/ViewItem.asp?id=27844





Yahoo Says It Is Backing Away From TV-Style Web Shows
Saul Hansell

After proclaiming grand plans to bring elaborately produced sitcoms, talk shows and other television-style programs to the Internet, the head of Yahoo's Media Group said yesterday that he was sharply scaling back those efforts. He said the group would shift its focus to content acquired from other media companies or submitted by users.

The executive, Lloyd Braun, the former chairman of ABC Entertainment, was the subject of speculation in recent weeks that he was leaving Yahoo over differences with its chief executive, Terry S. Semel.

Mr. Braun said yesterday that he had called a meeting of his group tomorrow in Santa Monica, Calif., where he would outline the new strategy. He said Mr. Semel would attend to endorse it.

"I thought it would be a good time, given all the rumor and innuendo, for me to reiterate once and for all that I am not going anywhere," Mr. Braun said.

Yahoo said Mr. Semel was not available for comment yesterday, but Daniel L. Rosensweig, the company's chief operating officer, said, "We are very happy with Lloyd, and Lloyd is very happy with Yahoo." Mr. Braun acknowledged some differences with Yahoo's management — his initial budget requests for this year were rejected, he said — but he dismissed that as normal corporate back-and-forth. And he said he had been engaged in a discussion with Mr. Semel and others at Yahoo's corporate headquarters in Sunnyvale, Calif., about his revised strategy for the media group, which includes Yahoo's news, sports, finance and entertainment sites.

"I didn't fully appreciate what success in this medium is really going to look like," he said. "This is not about creating one-off hits like in my old business. That is not going to create a sustainable competitive advantage over the long term."

With advertisers moving large parts of their budgets online, the market for content, created by professionals, bloggers and individual users, is expanding rapidly — as is the competition. Major media companies are developing video-based programming for the Internet. Myspace.com, purchased last year by the News Corporation, has become a major site based on user-contributed content. Many start-ups, like youtube.com, seek to follow suit.

Indeed, Mr. Braun said yesterday that the way to keep users on Yahoo's site longer — and thus be able to show them more advertising — was to offer ways they can create their own content and look at content created by others. He pointed to the site Yahoo built for the 2006 Winter Olympics, which prominently featured photographs from Flickr, Yahoo's photo-sharing site, along with articles both by news agencies and by a few columnists exclusive to Yahoo.

"I now get excited about user-generated content the way I used to get excited about thinking about what television shows would work," he said.

Mr. Braun insisted that Yahoo would not abandon its efforts to have original material, but he said it would embark on only a handful of new ventures this year, not the dozens he had been promising last year.

The company is not canceling its initial forays into programming — "Kevin Sites in the Hot Zone," a series of war reports, and "Richard Bangs Adventures," travelogues about unusual locales. But other initiatives, like a revival of "The Runner," an elaborate reality concept Mr. Braun originally developed for ABC, have been shelved.

"Original content is the salt and pepper on the meal," he said. "It is certainly not the engine driving this."

He acknowledged that coming off developing ABC programs like "Lost" and "Desperate Housewives," he had overly grand expectations for what he should do at Yahoo.

"I realized I have to check my ego at the door for a moment, and forget whatever expectations people had about me because of my former life, and really take a hard look at who should this business be built for the long term — a business that is not dependent on a series of expensive one-off's to survive," he said. Jordan Rohan, an analyst with RBC Capital Markets, said Yahoo's shift in strategy was sound. "Embracing things like blogs and sharing of content between individuals" is at least as important as "coming up with the next mega-online event," he said. "The Internet is such a niche content environment that the broadcast model does not really work."

Mr. Rosensweig, the chief operating officer, said Yahoo's intention had always been to combine content from users, media companies and to a lesser extent its own creation.

"Where the confusion has come in, and maybe the emphasis has evolved, is we always felt that kind of programming was a component of what we were going to do, not only what we do," he said. "It happened to be the part people associated with Lloyd, because that is what he had been doing."

Mr. Braun's track record so far is mixed. The sites he took over, which generally have been among the most popular in their respective fields, have been neither leaders nor laggards in audience growth. Yahoo News, for example, was the most popular news site in January, with 27.5 million users. But that is only a 2 percent growth in users from a year earlier, compared to 19 percent growth for the No. 2 site, MSNBC.com.

Yahoo's original-content efforts have yet to create the sort of hit Mr. Braun had talked about. "Kevin Sites in the Hot Zone" had 791,000 users in January, according to figures from comScore Networks provided by Yahoo. That was more than popular blogs like Gawker and DailyKos, but marginal for Yahoo, with more than 400 million monthly users.

Joanna Stevens, a Yahoo spokeswoman, said the company was pleased with the site because it attracted an affluent audience that was attractive to advertisers and because of "the positioning it gives Yahoo News as a serious news brand."

One possible consideration for Yahoo in its original-content efforts was concern among movie studios and television networks that it might be a competitor rather than a potential distribution arm — perhaps encouraging them to offer content first to Google, which says it has no interest in creating its own content.

"Hollywood is always paranoid about that sort of thing," said John Rose, a media consultant for the Boston Consulting Group. But he said their fears were overblown.

Mr. Rosensweig said concerns among studios were misguided. "We still think today, we have the best relationships with — and are the best partner for — the big media companies," he said.
http://www.nytimes.com/2006/03/02/te...y/02yahoo.html





Film Distribution Firm Debuts New Streaming Tech
Sebastian Rupley

The Web has already become a major medium for delivering TV, video content, and movies, but costs and long download times have loomed as problems. Now, startup company Itiva (www.itiva.com) is out to change that with its unique Quantum Streaming technology. It allows users to execute lickey-split downloads of high-definition video content over standard broadband lines.

In a demonstration for PC Magazine, Itiva president Michel Billard showed a two-minute hi-def 720p movie trailer from a major studio downloading in seconds, at a transfer rate of 5.5 Mbps. The trailer even played while the download was finishing. To put that in perspective, a general rule when downloading high-def video using competitive technologies is that it takes much longer to download the content than it does to watch it. With the speeds Itiva is achieving, users could download a 90-minute movie in well under 10 minutes.

The major movie studio seen in the demonstration has already signed on to have Itiva distribute its content, and Itiva is seeking deals with more film studios as well as concert promoters. But the company has its eyes on independent filmmakers, too. "Scaling small is as important as scaling big," says Itiva director Tom Taylor.

Using technologies such as BitTorrent to download films can mean long wait times, when there's only one source. That's primarily because client computers must compete to access the pieces that a movie has been broken down into (although once other clients receive the data they can independently pass it along to even more clients, accelerating the process).

By contrast, Itiva breaks hi-def content up into http-based Web pages called "Quanta," which can be cached at an ISP just like standard Web pages. ISPs already have the infrastructure they need to host such pages, so users can go direct to the ISP to get very fast downloads over standard broadband lines.

Public applications for Itiva's technology are only weeks away. It may play a key role as the Web goes Hollywood.
http://www.pcmag.com/article2/0,1759,1927282,00.asp





TiVo to Offer Tighter Rein on Children's Viewing
Saul Hansell

In a new twist on helping parents control what children watch on television, TiVo will announce today a service that lets its video recorders limit children to watching shows approved by one of two groups promoting family programming.

Parental controls have been built into most television and cable set-top boxes for the last decade, allowing parents to limit their children's viewing to shows that have certain ratings as assigned by the networks. TiVo as well had a parental control system based on these ratings. Many digital cable boxes offer even more options, letting parents select individual programs to block.

But Tom Rogers, TiVo's chief executive, said existing technology and ratings had been rarely used because both the software and the ratings were too difficult to understand.

"Ratings have had a marginal effect because parents don't fully understand how to use them," Mr. Rogers said. "Nor do they bring forward what they want their kids to watch."

TiVo has been hard hit by cable and satellite companies that are selling set-top boxes with video recorders built in, and its share price is off about 30 percent since last July. So the company is focusing on software that will differentiate its offering from generic alternatives. Another feature under development will let users share lists of their favorite shows with their friends.

The move on children's viewing comes at a time of increasing focus on giving parents more control. Several large cable companies have said they will offer a "family tier" or bundle of channels deemed appropriate for children.

Under the TiVo plan, parents will be able to designate ratings issued by one of two groups — Common Sense Media or the Parents Television Council.

Common Sense Media was formed in 2003 with backers including Charles R. Schwab, the brokerage company executive, and Philip F. Anschutz, the billionaire investor; the Parents Television Council, formed in 1995, is headed by L. Brent Bozell III, a conservative commentator.

The new TiVo service will let children watch only programs the designated group deems appropriate for the age range specified by the parent. In addition, parents can automatically record programs designated by the groups as especially worthwhile.

Parents can overrule the groups' choices or make their own list of approved and banned programs from scratch. They will also be able to type in a password to view programs denied to their children.

TiVo's software, called KidZone, will be made available without additional charge in June to the 1.4 million users of TiVo's stand-alone set-top boxes.

It will not be offered to the 2.6 million users of DirecTV boxes that also include TiVo recorders, because DirecTV has largely stopped selling them.

TiVo has typically charged $200 and up for its recorders, depending on capacity, and $12.95 for the service required to make the box work. It has recently been experimenting with deep discounts on the boxes or even giving the boxes free to customers who pay a higher monthly fee.

Even with its new feature, one issue that children's groups have been concerned about — advertising aimed at the young— will have to be addressed manually. The new service does not automatically edit out commercials.

Mr. Rogers said the company did not want to alienate the television networks.
http://www.nytimes.com/2006/03/02/te...gy/02tivo.html





Mandriva 2006 to be 1st Linux Desktop to Offer Built-in Online Music Service Feature Through Mindawn
Press Release

Mandriva and The Kompany, the creator of Mindawn, a Linux-friendly online music and video service, have announced their partnership to provide customers with built-in software to take advantage of legitimate digital content using Mandriva Linux 2006. Thanks to the collaboration between the two companies, Mandriva Linux 2006 users can access high quality music and video files at the Mindawn website.

Mindawn has been supporting Linux for over a year. The Mindawn platform makes it easy and convenient for Linux users to access a growing library of diverse music. Mindawn is open to all artists as well as all consumers, so the many amateur, home and professional musicians using Rosegarden, Ardour or any of the other music sequencing and recording systems available for Linux have a ready-made channel to distribute their music.

Most online music services tie the user to one or at best two computer platforms: iTunes is only for Mac OS X and Windows; Napster is Windows-only. Mindawn, on the other hand, works with all three major platforms including Linux. With Mindawn's cross-platform client software, users can hear a full preview of the entire song, unlike competing services which only offer brief excerpts.

Customers can perform any function of the system on the Mindawn website aside from previewing songs, which requires the Mindawn player. This software allows customers to preview a song up to three times in full length, without having to pay for it. When users are ready to buy, the player will provide several download and file format options. Mindawn's player is a full featured audio client with robust library capability and integrated Internet radio client.

Mindawn's competitors typically offer music files that are reduced in quality through what's called "lossy compression". The more compressed a file is, the greater the loss in sound quality. By contrast, Mindawn offers its files in both Ogg Vorbis and FLAC formats. Ogg Vorbis employs lossy compression, but unlike MP3, is a totally free and open sound format. It offers superior sound quality compared to MP3 and other lossy compression techniques. Meanwhile, FLAC employs lossless compression, allowing it to offer full CD quality in a file 50% smaller than a WAV file. FLAC can easily be converted to AIFF or WAV files and burned to disc for use in standard CD players. It can also be converted to virtually any other lossy format for use on any portable media player.
http://br.sys-con.com/read/187403.htm





Dumb’s the word

Variety: MPAA Can't Even Sell Its Tech Partners On Complex Analog Hole Crippleware
David S. Cohen

The Hollywood Post Alliance Tech Retreat isn't usually a hubbub of controversy. But the MPAA's Brad Hunt got a testy reception Feb. 22 when he gave a half-hour talk on the movie industry's plans for digital content protection in next-generation home entertainment hardware.

The problem is the "analog hole": Since many TVs, even hi-def sets, aren't digital, next-generation players need to be able to send out an analog signal. But it's fairly easy to record that signal onto pirated disks nearly as good as the hi-def original -- and of better quality than today's DVDs.

For content owners counting on selling their libraries all over again on hi-def DVD, that's a mighty large hole. So they've insisted on a slew of complex copy-protection schemes.

The industry hopes those schemes will be easy for consumers to use. But when Hunt took questions from the audience, it was clear they were skeptical.

One questioner asked who would be responsible for the extensive consumer education needed. Hunt's answer -- that he hoped retailers would do it -- drew dubious groans.

The final question summed up the problem: "This is a room full of people whose living depends on this working. You're getting pushback to the point of hostility. If you can't sell this to us, how are you going to sell it to the target 16-45 demographic?"

Hunt said the marketplace would ultimately sort it out.

As Cory often says, the marketplace doesn't want crippled technology and anti- consumer restrictions. Just look at the Sony BMG Rootkit debacle. So what does Hunt really mean? More lawsuits and government tech-mandates? More content cartel "licensing societies" that limit innovation? I suspect the MPAA's "marketplace" solution will end up looking a lot more communist than competitive.
http://lawgeek.typepad.com/lawgeek/2...y_mpaa_ca.html





A-Hole Bill Would Make A Secret Technology Into The Law Of The Land

If the controversial Analog Hole bill makes it into law, US technologists will have to obey a law whose most important details are a trade-secret.
Cory Doctorow

The entertainment industry, always a bastion of media savvy, has proposed its "A-Hole" bill as a legal means of limiting the conversion of analog music and video to digital files. Under the bill, every maker of a device that can convert analog signals to digital ones (like iPods, camcorders, and PCs) would be required by law to be built with a detector for a proprietary watermarking technology called VEIL (the use of free/open source in these technologies would be outlawed to prevent the removal of VEIL detectors).

The idea is that any time you attempted to make a digital recording, your device would seek out the VEIL watermark and respond to any special instructions (e.g., "No recording allowed") it discovered there.

But what the hell is VEIL? No one really knows. The sole commercial deployment of this technology to date has been in a Batman toy (why this makes it fit to be included by law into every American recording device is beyond me).

Copyfighting Princeton Prof Ed Felten called the company that makes VEIL to find out how the technology works. Their answer? They'll tell Ed how VEIL works only if he pays them $10,000 and signs a non-disclosure agreement. And they'll only tell him how the decoder works -- there's no price you can pay to find out how VEIL encoding works.

As Ed points out, this should be a deal-breaker for even considering the A- Hole bill (of course, there are lots of other deal-breakers in that bill, but this is a big one). How can the American public and its lawmakers determine whether this is a fit technology to mandate if its workings are a secret?

The details of this technology are important for evaluating this bill. How much would the proposed law increase the cost of televisions? How much would it limit the future development of TV technology? How likely is the technology to mistakenly block authorized copying? How adaptable is the technology to the future? All of these questions are important in debating the bill. And none of them can be answered if the technology part of the bill is secret.

Which brings us to the most interesting question of all: Are the members of Congress themselves, and their staffers, allowed to see the spec and talk about it openly? Are they allowed to consult experts for advice? Or are the full contents of this bill secret even from the lawmakers who are considering it?

The A-Hole bill is making the rounds of the House, EFF has an easy way to write to your Congresscritter about this. Link
http://www.boingboing.net/2006/01/23...would_mak.html





Watermarking as a Strategy for Insisting on Corporate "Creators": Is DRM the Killer App for Corporate Authorship?
Kathryn Cramer

Ed Felton at Freedom to Tinker has a good post on the problem of digital watermarking, How Watermarks Fail (via BoingBoing), in which he concludes that watermarking schemes (such as Koplar's VEIL technology, discussed in my post VEIL Technology: Four Patents & an Application the other day) are not well suited for Digital Rights Management (preventing unauthorized copying of copyrighted material).

The discussion in the comment section is particularly interesting. Consider this comment, for example:

Let’s imagine a case where Microsoft’s post-Vista OS, codenamed Blacksheep, will only work with video cards that require a watermark in order to play Super-HD video (2048-4096 lines of resolution). Then such videos could be distributed in encrypted form with the watermark embedded. The decryption and watermark detection algorithm could be public; however the encoding/embedding algorithm would be secret.

Users could use the public decryption algorithm to create raw MPEG files with the watermark stripped, but would not be able to play them on commercially available video cards (similar to how video cards are now requiring monitors with HDCP support in order to play HD video). Users would not be able to create new videos with altered watermarks because the algorithm to do that is secret.

If digital watermarking schemes for DRM are put into practice, they may have little effect on the problem of bootleg versions of mega-corporate products. However, as discussed in the comment section, they may be quite effective about keeping digital artistic productions by individuals out of the distribution system: in the end, what DRM may accomplish is forcing individuals to give big corporations a cut for distribution just to get the authorized watermarking.

My experience in the early-mid 90s teaches me that part of the purpose of setting the production standards of early CD-ROMs absurdly high was to promote corporate authorship over individual authorship with the idea that digital products could be authored like film and TV, not like books, thus empowering the executive level and disempowering the actual creators, or rather reconfiguring relations such that executives become part of the creative "team."

Now computers are being sold that allow individuals, and small groups of individuals, to produce works to very high production standards on very low budgets. This also threatens the rise of corporate authorship. So watermark-style DRM may do very little to prevent the "piracy" about which the big media corporations are up in arms, it may be the killer app of corporate authorship.

It needs to be said over and over that in the early '90s, corporations did not own or control most of these digital rights they now claim the right to defend. In large part, these rights were taken, without additional compensation, from the artistic creators. (I know who the real pirates are!)

Transitioning from a world where art is created by individuals to a world where it is "created" by corporate "creative teams" is the second part of an overall stratgey to consolidate corporate control over the revenue that can be extracted from the popular arts; for creating a future in which consumers remain consumers and don't try to horn in on the revenue due to producers of artistic commodities.
http://www.kathryncramer.com/kathryn...arking_as.html





Fight For Your Rights

The upcoming Gower Review, which will address the ownership of digital rights, has focused attention on the conflict between the needs of consumers and the commercial imperatives of content providers.
Simon Chapman and Dan Caunt

Over the last few years there has been massive growth in online media, forcing digital rights owners to come to terms with an entirely new way of delivering their services to consumers. The media industry now needs to be more alert than ever to the need for good digital rights management (DRM).

Consumers now expect fast and instant access to every kind of media, at a time convenient to themselves. This increasing desire for on- demand content can conflict with the media industry’s desire to control their rights. The industry needs to be in a position to offer this kind of service but is reluctant to do so unless it is satisfied that it can retain control over those rights.

The umbrella term DRM refers to any of several technologies used to enforce pre-defined policies controlling access to digital data. DRM is not simply a digital method of preventing copying; it also has the practical role of administering ways in which rights owners can offer and control their online sales.

So how can the various media industries best achieve effective DRM? Rights owners understand that they need to keep up with technology and be prepared to offer their services to consumers via new and fast- evolving methods. Rights owners who fail to do this risk missing out on a lucrative chunk of the market and could potentially end up pushing consumers towards unauthorised alternatives. In this context, the three main players are: the rights owners, such as Sony and Warner Bros; the companies, such as Google or Apple; and the consumer.

There are a number of barriers to the provision of online digital content. It has been suggested by some commentators that attempts to offer legal film downloads have been delayed because of copyright fears by the rights owners.

Film or record companies are concerned about losing control of their rights and also losing their rights to just one distributor.

Currently, it is music delivery companies that are at the forefront of DRM use, employing various methods to protect the copyright held in the products they are selling. For example, the Apple iTunes Music Store allows users to purchase tracks online to burn that song on to a CD or an iPod device. The purchased music files are encoded so that only iPod devices — and not other MP3 players — can play the protected files.

However, DRM systems do have weaknesses and can be easily bypassed through widely available freeware programs. This may explain why rights owners have been slow on the uptake offering films by similar means. Warner Bros has only recently launched its In2Movies service, where viewers can download Warner Bros movies and regional programmes. Initially, this service is to focus on the German-speaking market but will be rolled out globally using peer-to-peer file-sharing technology.

Following news of the launch, Warner Bros Home Entertainment Group president Kevin Tsujihara said: "One of the most effective weapons for defeating online piracy is providing legal, easy-to-use alternatives."

In the UK, individual users face primary liability for copyright infringement where they copy or issue copies of copyright material. Under the Copyright, Designs and Patents Act 1988 (CDPA), copyright is infringed by reproducing a work in any material form, including storing it by electronic means. The UK is one of a handful of countries in the European Union (EU) whose laws do not offer an exception for private usage or copying, meaning individual users infringe copyright when they copy music files from CD to their computer. Despite having no such right, most consumers believe they are allowed to make personal copies of music.

The absence of a private use exception in the UK offers much comfort to rights owners. They can offer media to the public in the knowledge that any additional copying will still infringe the CDPA. That said, it can be very difficult to find and prosecute online infringers as the relatively few actions brought against peer-to-peer network users demonstrate.

The Copyright and Related Rights Regulations 2003 implement the European Copyright Directive. Under these Regulations, it is also a criminal offence to create or promote means in order to circumvent DRM systems built into copyright works. Such circumvention is now a civil offence in the traditional sense if it leads to infringement.

In late 2005, the Chancellor announced an independent review to examine the UK’s intellectual property regulation. The Gower Review, expected to be delivered in the autumn, will examine whether the present legal framework reflects the challenges of the digital age. It is inevitable that the review will address private usage.

The use of DRM raises numerous issues about competition and consumer rights. It allows rights owners a complete monopoly over their digital content, something many companies would argue is a good thing. However, consumer groups such as the National Consumer Council argue that DRM prevents competition and drives up prices for the public.

The All-Party Parliamentary Internet Group met in February 2006 to hear oral evidence, prior to its report on DRM which is due to be published in April. The committee was told that existing copyright law was sufficient, but that consumers do not have enough understanding of it.

The ultimate aim is for a balance to be found between the interests of the rights owners and the demands of the consumer. We are seeing attempts to achieve this being played out in the current row over online books, where Google has been under attack from book publishers over plans to put millions of titles online. Google’s Print Library Project aims to index and scan books from five major libraries. The publishers are concerned that Google’s actions will infringe copyright, but Google maintains that users will not be able to download whole books from their ‘catalogue’.

Sony’s online book service has taken the different approach of securing licence deals with publishers to sell e-books via its Connect online store. Google, while wanting to side with the consumer, will likely have to cede to the rights owners by taking out the necessary licences to offer a comprehensive digital book service similar to Sony’s.

This may bring comfort to rights owners, but it is likely that Gower Review will significantly affect the future of DRM in the UK. The success of services such as iTunes in this country owes a great deal to the balance between UK copyright laws and good DRM. However, if the Gower Review introduces a ‘private use’ exception, then we may see a change in attitude from the rights owners. If consumers are allowed by law to make copies of copyrighted content for their own private use, then rights owners such as record labels or publishers may be reluctant to offer such a broad service to the public.

The online market for digital media could be severely damaged without robust copyright regulation. Rights owners will only offer their copyrighted content to the public in the knowledge that they will be rewarded for their investment. Yet consumers’ interest in instant access to all kinds of media cannot be ignored and is only likely to increase. As a result, the outcome of the Gower Review is awaited with much anticipation.
http://www.legalweek.com/ViewItem.asp?id=27843





Nokia N91 Music Phone Delayed Due to DRM

Moconews is reporting that Nokia’s high-end N91 phone— the hefty, metal model with a built-in 4GB hard disk—has been pushed back to the third quarter of 2006, despite originally being scheduled to ship around last Christmas. The hangup? Implementing Microsoft’s Windows Media DRM, which for unstated reasons has proven more difficult for Nokia to include than they first anticipated.

There’s also mention that the bundled Symtella peer-to- peer file sharing software might not be included after all. The Gnutella-based P2P software would have allowed Nokia N91 owners to share files via the phone’s built-in Wi-Fi, but now Nokia’s spokesperson is said to be “talking guardedly about sharing N91 playlists by Bluetooth or MMS.”

Almost a year late and short features. Not good for a phone announced in April of ‘05.
http://us.gizmodo.com/gadgets/cellph...drm-156598.php





Skyperiffic!

Skype 2.0, now with video calling

Official release. Version: 2.0.0.90. Release date: March 1, 2006
File name: SkypeSetup.exe File size: 9.5 MB

The new, shiny Skype 2.0

Our best ever call quality.

· Smile, wave or say hello to anyone, anywhere in the world with free one-to-one video conversations.
· Easily sort your contacts into groups like ‘colleagues’, ‘friends’ and ‘family’.
· Display mood messages and your local time, so people know where you are and how you’re feeling.

http://www.skype.com/download/skype/windows/





AMD's Lawyers Call On Skype
Tom Krazit

As part of its ongoing antitrust case against Intel, Advanced Micro Devices on Tuesday served Skype with a subpoena demanding documents related to its deal to make one feature in Skype 2.0 available exclusively to Intel users.

The legal filing joins a long list of subpoenas AMD has filed in search of evidence that Intel has used its dominant market share of x86 PC and server processors to prevent AMD from winning business with certain partners. Intel has denied those accusations, and the companies are preparing for an antitrust trial that promises to reveal loads of details about the inner workings of the PC industry.

AMD is now focusing on a feature in Skype 2.0 that enables the ability to make 10-person conference calls only with Intel dual-core processors. Users with AMD dual-core chips or single-core chips are restricted to hosting five-person conference calls because only Intel's chips offer the performance necessary to host the 10-way call, according to Skype.

AMD disagrees. It believes Intel has provided Skype with incentives to limit the feature to Intel's chips, said Chuck Diamond, a partner with O'Melveny & Myers and lead counsel in AMD's antitrust suit against Intel. Intel has denied doing so, but even if no financial incentives were included in the deal, as a company with dominant market share, Intel is subject to different rules, he said.

"The law requires a monopolist to compete on the merits. This is not competition on the merits," Diamond said.

A Skype executive declined to comment earlier this month when asked whether the company had tested the performance of its software on both Intel's and AMD's dual-core chips. An Intel representative confirmed that there are no instructions that specifically enhance the performance of voice over Internet Protocol (VoIP) software like Skype's in Intel's dual-core chips. He also said that Skype's software is using a function called "GetCPUID" to permit 10-way conference calls only when that function detects an Intel dual-core processor on start-up.

A Skype representative had no immediate comment on the subpoena. An Intel representative declined to comment.
http://news.com.com/AMDs+lawyers+cal...3-6044365.html





Fusion Acquires Proprietary SIP Peer-to-Peer Technology
Johanne Torres

VoIP technology service provider Fusion Telecommunications International Inc. announced on Tuesday that it acquired proprietary intellectual property that will allow Directed Peer-to-Peer Internet phone connections between Session Initiated Protocol (SIP)-enabled devices without having to route the calls through a network of third-party computers, as typically occurs in a peer-to-peer environment.

"This technology will give Fusion the opportunity to expand its existing suite of paid service offerings and participate in the growing peer-to-peer telephony market through its efonica brand, including the free call segment now dominated by Skype," said Fusion's president and chief operating officer Matthew Rosen.

The technology incorporates an approach that builds upon worldwide accepted VoIP standards and integrates with Fusion's carrier-class network and back-office infrastructure. Fusion's service offerings do not require a computer to work. Customers will be able to make calls between any combination of computers, Internet connected telephones, wireless devices, and other SIP-enabled hardware. When placing a call using Fusion's Directed SIP Peer-to-Peer (DSP) technology, customers automatically access a central registry for authentication, enhancing security when compared to many peer-to-peer alternatives. A routing engine then facilitates a connection directly between calling parties without having to go through another user's computer or calling device, as is required in other peer-to-peer models. Connections can be accomplished from any location worldwide and typically occur in a fraction of a second.

"It is widely believed that SIP is quickly becoming the de facto VoIP standard for communication between VoIP hardware devices such as ATAs, IP phones, wi-fi phones, and many new mobile and wireless devices," said Dr. Joel Maloff, Fusion's chief technology officer. "Utilizing SIP as its standard gives Fusion the ability to provide services to the large and growing population of consumers buying SIP- enabled devices. Additionally, most VoIP hardware manufacturers are rapidly deploying new advanced SIP devices that will work with Fusion's service offerings. Fusion's technological strategy will allow us to continue capitalizing on the growing popularity of SIP throughout the VoIP industry, while leveraging the significant cost advantages of peer-to-peer."

Fusion made news back in November when it announced that it entered into an agreement to acquire the assets of iFreedom Communications International Holdings Limited, which markets monthly recurring International VoIP service plans. The purchase price was reported to be $500,000 in cash going towards retiring certain liabilities of iFreedom and 1,100,000 shares of stock, of which 750,000 shares holding in escrow and subject to a performance based earn out. The transaction was anticipated to close prior to the end of the first quarter of 2006, subject to certain conditions.

Under the terms of the agreement, Fusion was to acquire iFreedom's customer base and operations in Hong Kong, the Philippines, Malaysia, the United Kingdom, and the United States. The assets also included a call center in the Philippines, complementary sales and support staff, and licenses in both Malaysia and the Philippines.
http://news.tmcnet.com/news/2006/02/28/1416034.htm





Hello it’s me

Mobile Tracking Devices On Trial
Spencer Kelly

Your mobile phone is a beacon - a radio transmitter in a box. Therefore it is possible to trace the signal and work out where it is.

There are now several web companies which will track your friends' and family's phones for you, so you always know where they are.

But just how safe is it to make location details available online?

There are several reasons why you may want to track someone. You may be a company wanting to keep tabs on employees during work hours, or a parent wanting to check up on a child's whereabouts.

These sorts of tracking services, now available in the UK, get information from the network about which cell your phone is currently in, and, for a small fee, display the location on an online map.

As well as checking where a certain phone is right now, you can run scheduled lookups, or snail trails, to record the phone's movements throughout the day, and produce a report for you to peruse at your leisure.

Obviously you cannot just enter any mobile phone number and expect to track someone.

First of all you need to prove your identity, via a credit card, and then, crucially, the owner of the phone in question needs to consent to being tracked.

The owner is sent a text message telling them about the tracking request, to which they must reply.

Experiment

The question is: is it possible to circumvent this security, and track someone without their knowledge?

I attempted to find out, using regular contributor Guy Kewney, an independent technology journalist and, for one day only, human guinea pig.

I sent him on a tour of London. He could go anywhere he wanted, and I planned to meet up with him later and tell him, hopefully, where he had been.

Guy did not know that when I borrowed his phone for a few minutes earlier in the day, I took the opportunity to register it on one of the tracking services.

I received the incoming text message warning him about the tracking, responded to it and then deleted it from his inbox.

When I gave him his phone back, Guy had no idea he was now in possession of a consenting tracking device.

Hence, a little while later, I could watch him emerge from the tube at the start of his tour.

But just borrowing someone's phone for a few minutes is too obvious a loophole. It is one which has already been closed by an industry body which oversees new technologies such as mobile tracking services.

Voluntary rules

The Mobile Broadband Group has drawn up a voluntary code of conduct which the networks in the UK ask location providers to stick to.

One of the conditions of the code is that after a phone is registered as a tracking device, reminder texts should be sent to the phone at random intervals.

This way, it should be impossible for a malicious tracker to intercept every reminder.

The problem is, those random reminders are not required to be sent very frequently.

We tracked several phones over several days, and often had to wait for a day or two before receiving a reminder message.

Hamish Macleod from the Mobile Broadband Group, who came up with the code of conduct, argues this is enough.

He said: "We assessed this risk during the development of the code and consulted obviously with all the experts that we did, and the schedule of random alerts that we came up with we thought was adequate to protect against the risks.

"This is a situation to be kept under review as the service is developed."

Child-safe?

With more and more children owning mobile phones, special attention needs to be given to who can track them.

If you are not a genuine parent or guardian, the code requires location services to check that both the tracker and the person being tracked can prove they are consenting adults.

Mr Macleod says: "The person that is to be located has to demonstrate to the service provider they are at least 16 years old.

"They can do this through various channels, for example they can get a credit card number which is used as a proxy for age verification, or something like that."

At least, that is what is supposed to happen. But neither of the services we tested asked the person being tracked to prove they were an adult.

Although they did ask us for the age of the person we wanted to track, they did not check we were telling the truth.

The companies were not following the letter of the code and, what is more, no-one was holding them to account.

Neither service would comment on this oversight.

Although the code of conduct was well intentioned, the Mobile Broadband Group admits it will need refining as loopholes become apparent.

It also highlights the limits of such voluntary codes, and the problems with policing them.

Jago Russell from the human rights group Liberty says: "We have concerns in general about industry codes of practice. They aren't legal regulation;
they don't give the consumer an effective legal remedy if the code of practice isn't complied with.

"So in many ways they're not really worth the paper they're written on."

Changes

As a result of our investigation, The Mobile Broadband Group is making some changes to the code of conduct.

The frequency of the random reminders is going to be increased, and the code will make clearer the appropriate way to check the age of the participants.

Guy Kewney says: "It's a shame but then if you start regulating new technology you usually fall down because people don't expect the unexpected.

"The real problem is that you can't actually perceive the unintended consequences of your technology change, so a hard and fast rule that says 'don't do this' won't stop you doing that, in which case you've wasted your time passing it."

Should we really be worried about being tracked by mobile phones?

Guy Kewney says: "You can worry about anything in this society. If I wanted to track you, the easy way to do it is - well you've found one way, but if they've closed that loophole or if it becomes tricky - then I just hire a private detective.
http://news.bbc.co.uk/go/pr/fr/-/2/h...ne/4747142.stm